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United Overseas Grp (UOG)

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Thursday 05 April, 2001

United Overseas Grp

Final Results

United Overseas Group PLC
5 April 2001



For Immediate Release                   5 April 2000



                          UNITED OVERSEAS GROUP PLC

              FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000

             Substantial return to profitability - £7m turnaround

  Turnover of £118.4m; Pre-tax profits of £3.2m; Earnings per share of 1.36p



United Overseas Group plc ('UOG'), which specialises in the worldwide
distribution of branded consumer goods, announces final results for the year
ended 31 December 2000, which demonstrate a substantial return to
profitability.



Mr. Alex Watson, Chairman, said in his Statement to shareholders:

'Our performance in the second half of the year built solidly on the progress
we made in the first half, and we regard the outcome for the year as a whole
as a satisfactory step forward in the development of the Group.'



'The management team, having achieved a major turnaround in trading
performance in the year under review, is committed to implementing our
development strategy to ensure long term sustainable growth and maximisation
of Shareholder Value.'



Key points and extracts from the Chairman's Statement:

(comparatives are 12 month figures to 31 December 1999)



*        Turnover up 5% to £118.4m (1999: £113.2m)

  * Pre-tax profits of £3.2m (1999: £3.9m loss)
  * Earnings per share of 1.36p (1999: 3.07p loss)
  * Significant improvement in gross margins - up from 20% to 25%
  * Improved profitability across all geographical regions - major
    turnaround in UK
  * Stock position further improved with £1.4m reduction during year
  * Positive cashflow generated for second successive year
  * Board and senior management team further strengthened
  * Founder retires after 25 years with UOG



Mr. Michael Corke, Group Chief Executive, added:

'The benefits of the decisive actions that were taken are beginning to filter
through, and we will retain our focus on growing the business and improving
operational performance.'



                                    -ends-

Enquiries:

Michael Corke, Group Chief Executive
Phil Carr, Group Finance Director
United Overseas Group PLC                 Tel: 01733-362300

Peter Binns/Paul Vann
Binns & Co PR Limited                     Tel: 020 7786 9600




Chairman's Statement



In my last statement to shareholders at the time of the Interim Results in
September 2000, I stated the Board's conviction that having achieved a strong
recovery in our fortunes in the first six months of the year, we were well
positioned for sustainable profitable growth. Our performance in the second
half built solidly on the progress we made in the first half, and we regard
the outcome for the year as a whole as a satisfactory step forward in the
development of the Group. There is much work still to be done, but the initial
benefits of the management restructuring that we have undertaken over the past
18 months are now evident in the Group's all round improved performance.



Results in brief



In the year to 31 December 2000 turnover increased by 5% to £118.4m (1999: £
113.2m), and pre tax profits of £3.2m compared to a pre tax loss of £3.9m in
1999. Earnings per share were 1.36p compared to a loss per share in 1999 of
3.07p.



Dividend policy



Although the financial results for 2000 represent a substantial turnaround
from 1999 we are not proposing the payment of a final dividend in respect of
the year under review. It is, however, the Board's intention to adopt a
progressive dividend policy in the future, as soon as our operational
performance and the overall financial position of the Group will allow.



Business progress



The performance in 1999 was the catalyst for some of the fundamental changes
that your Board considered necessary, in particular the strengthening and
broadening of the management structure. In 2000 we have seen the initial
benefits of these changes, and we believe they will greatly assist the Group
to deliver its full potential in the future.



During the year greater focus on stock management and buying resulted in gross
margins rising from 20% in 1999 to 25% in 2000, together with reduced stock
levels and improved gearing.



The results for the year therefore give us every indication that the first
phase of the planned recovery is complete.



Board changes and senior appointments



Jeffrey Curtiss, the founder of the Group, stepped down from his role as Chief
Executive Officer last September, prior to retiring from the Board in March
2001. Jeffrey has been the inspiration and the driving force behind the growth
and development of United Overseas over the past 25 years and we shall all
miss his foresight and vision. Jeffrey's overall contribution has been
remarkable, but he recognises the Group has now entered a new era, and he has
been instrumental in ensuring there is a strong and committed management team
in place to oversee and guide the Group through the next stages of its
development. We wish Jeffrey well in his retirement from the Group.



As previously announced with the Interim Results John Gordon and Robert van
den Heuvel were appointed as Non-Executive Directors in April 2000.



Following Jeffrey's decision to step down as Chief Executive last September,
Michael Corke was appointed Group Chief Executive. During the year, the
following appointments to the Group's main board were also made: Bert
Boersema, Managing Director, Northern Continental Europe in June 2000, Phil
Carr, Group Finance Director in August 2000 and Bruce Salkin, President of
UniTrade Marketing Group Inc., in November 2000.



Additionally, the senior management appointments we have made in the United
Kingdom, United States, and the Netherlands means that the team is now
substantially in place to drive the Group forward.



Stockbrokers



Williams de Broe Plc were appointed as stockbrokers and financial advisors
with effect from 1 September 2000.



Key business drivers



The Group specialises in the worldwide distribution of excess branded consumer
goods. We have formed mutually beneficial long term relationships with both
customers and suppliers, and it is these partnerships that form the basis for
the Group's continued development in this dynamic sector. Both customers and
suppliers are consulted regularly in order to ensure that our service is
tailored to individual needs in order to provide added value. Our aim is for
our trading partners, both customers and suppliers, to continue to confidently
rely on our services, to meet local and international supply and demand
fluctuations in an efficient manner.



As Europe's leading operator in this growing market, the Group is well placed
to maximise its position through on-going organic development, with strong
customer demand internationally for discounted branded goods driving the
expansion of discount retailing.



Strategy



Recent senior appointments in the United States are aimed at realising
additional growth in this region, whilst Northern Europe continues to provide
the Group with good opportunities in all our core categories of branded
products. Selective expansion outside these core categories will also be
considered, as and when profitable long term opportunities arise and expertise
in these fields is identified. The move into computer and console software is
a perfect example of how our traditional skills can be extended into new, high
growth areas.



The prospects for sustainable growth through continued development driven by a
highly motivated management team, remain encouraging. Future growth will be
supplemented by selected acquisitions in key markets, as and when suitable
opportunities arise.



The management team, having achieved a major turnaround in trading performance
in the year under review, is committed to implementing the development
strategy to ensure long term sustainable growth and maximisation of
Shareholder Value.



Outlook



Trading in 2001 has begun slowly due to economic factors adversely impacting
consumer confidence resulting in a slowdown in retail sales, particularly in
the United Kingdom and United States. However, at the New York Toy Fair in
February, a record value of orders were secured reflecting a stronger product
offering.



With continued focus on sales development and greater operational efficiency
we expect growth to continue in the current year. The Group is at an exciting
stage in its development and your Board views the future with confidence.



Alex Watson - Non-Executive Chairman

4 April 2001



Consolidated Profit and Loss Account

For the year ended 31 December 2000


                                                             2000         1999
                                                            £'000        £'000
                                                       ----------   ----------
Turnover                                                  118,441      113,192

Cost of sales                                            (89,111)     (90,689)
                                                       ----------   ----------
Gross profit                                               29,330       22,503

Distribution costs                                        (9,991)     (10,576)
Administrative costs: other                              (13,686)     (13,639)
Administrative costs: amortisation of goodwill              (520)        (499)
Other operating income                                        333          222
                                                       ----------   ----------
Operating profit/(loss)                                     5,466      (1,989)
Profit on disposal of property                                  -          192
Net interest payable                                      (2,247)      (2,147)
                                                       ----------   ----------
Profit/(loss) on ordinary activities before taxation        3,219      (3,944)

Taxation                                                  (1,162)        (125)

                                                       ----------   ----------
Profit/(loss) on ordinary activities after taxation         2,057      (4,069)

Minority interests                                          (169)        (205)
                                                       ----------   ----------
Profit/(loss) attributable to shareholders                  1,888      (4,274)

Dividends                                                       -            -
                                                       ----------   ----------
Retained profit/(loss) for the year                         1,888      (4,274)

                                                           ======       ======
Earnings/(loss) per share

      - Basic                                               1.36p      (3.07p)
      - Diluted                                             1.36p      (3.07p)
      - Adjusted basic                                      1.73p      (2.71p)
                                                           ======       ======

Dividends per share                                         0.00p        0.00p
                                                           ======       ======



All of the above relate to continuing activities.



Consolidated Statement of Total Recognised Gains and Losses


                                                                 2000      1999
                                                                £'000     £'000
                                                            ---------- ---------
Profit/(loss) for the year                                      1,888   (4,274)
Net currency translation differences on foreign currency
net investments                                                   333     (549)
                                                                  
                                                            ---------- ---------
                                                                2,221   (4,823)
Total recognised gains and losses                              ======    ======

Balance Sheet

At 31 December 2000


                                                                         Group
                                                              2000        1999
                                                             £'000       £'000
                                                        ----------  ----------
Fixed assets
Intangible assets                                            9,262       9,800
Tangible assets                                              3,181       2,777
Investments                                                    300         300
                                                        ----------  ----------
                                                            12,743      12,877
                                                            ======      ======
Current assets
Stocks                                                      34,306      35,671
Debtors - due within one year                               26,916      22,544
Cash at bank and in hand                                     1,369       1,742
                                                        ----------  ----------
                                                            62,591      59,957

Creditors: amounts falling due within one year            (37,806)    (36,777)

                                                        ----------  ----------
Net current assets                                          24,785      23,180

                                                        ----------  ----------
Total assets less current liabilities                       37,528      36,057


Creditors: amounts falling due after more than one         (1,353)     (2,272)
year

                                                        ----------  ----------
Net assets                                                  36,175      33,785

                                                            ======      ======
Capital and reserves
Called up share capital                                     13,990      13,990
Share premium account                                       55,207      55,207
Profit and loss account                                   (33,607)    (35,828)
                                                        ----------  ----------
Equity shareholders' funds                                  35,590      33,369
Equity minority interests                                      585         416
                                                        ----------  ----------
                                                            36,175      33,785
                                                            ======      ======



Approved on behalf of the Board on 4 April 2001 by:



A E Watson                M H R Corke
Chairman                  Chief Executive



Consolidated Cash Flow Statement

For the year ended 31 December 2000


                                                                 2000      1999
                                                                £'000     £'000
                                                            ---------- ---------
Net cash inflow from operating activities                       5,335     4,170
                                                            ---------- ---------
Returns on investments and servicing of finance
Interest received                                                 128        81
Interest paid and similar charges                             (2,300)   (2,095)
Interest element of finance leases                               (50)      (60)
                                                            ---------- ---------
Net cash outflow from returns on investments and servicing
of finance                                                     (2,222)   (2,074)
                                                              
                                                            ---------- ---------
Taxation
UK corporation tax recovered                                      398       323
Overseas taxation (paid)/recovered                            (1,912)       346
                                                            ---------- ---------
Net cash (outflow)/inflow from taxation                       (1,514)       669

                                                            ---------- ---------
Capital expenditure and financial investment
Purchase of tangible fixed assets                               (961)   (4,132)
Purchase of intangible fixed assets                                 -      (26)
Purchase of fixed asset investments                                 -     (100)
Sale of tangible fixed assets                                     222     7,434
                                                            ---------- ---------
Net cash (outflow)/inflow from capital expenditure and
financial investment                                             (739)     3,176
                                                                
                                                            ---------- ---------
Equity dividends paid                                               -     (182)

                                                            ---------- ---------
Cash inflow before use of liquid resources and financing          860     5,759

                                                            ---------- ---------
Financing
Loans repaid                                                    (685)   (7,600)
Finance lease capital payments                                  (352)     (500)
New loans                                                         573     2,796

                                                            ---------- ---------
Net cash outflow from financing                                 (464)   (5,304)

                                                            ---------- ---------
Increase in cash in the year                                      396       455

                                                               ======    ======




All cash flows relate to continuing activities.




Notes to the Accounts


1   STATUTORY ACCOUNTS FOR 2000


The financial information contained in the Preliminary Results does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.  The information for the year ended 31 December 2000 and 31 December 1999
is extracted from the audited accounts for the year ended 31 December 2000,
which will be filed with the Registrar of Companies shortly, and upon which the
Auditors have expressed an unqualified opinion.


2  TURNOVER AND PROFIT BEFORE TAX AND NET ASSETS


Segmental information


                                                           2000            1999
                                                          £'000           £'000
                                                     ----------      ----------
a) Turnover
By destination
United Kingdom                                           55,259          55,086
Rest of Europe                                           42,585          41,491
North America                                            18,776          14,775
Rest of World                                             1,821           1,840
                                                     ----------      ----------
                                                        118,441         113,192
                                                         ======          ======
By origin
United Kingdom                                           59,899          59,391
Rest of Europe                                           39,356          38,559
North America and Asia                                   19,186          15,242
                                                     ----------      ----------
                                                        118,441         113,192
                                                         ======          ======
b) Profit/(loss) before tax by origin
United Kingdom                                            1,466         (4,019)
Rest of Europe                                            1,309             230
North America and Asia                                      444           (155)
                                                     ----------      ----------
                                                          3,219         (3,944)
                                                         ======          ======
c) Net assets by location
United Kingdom                                           20,899          20,319
Rest of Europe                                           13,014          11,916
North America and Asia                                    2,262           1,550
                                                     ----------      ----------
                                                         36,175          33,785
                                                         ======          ======



The Directors consider that the Group has only one class of business and
consequently no further analysis of turnover or profit is given.

3      EARNINGS/(LOSS) PER SHARE



Basic earnings/(loss) per Ordinary Share is calculated by dividing the profit
after taxation and minority interests of £1,888,000 by 139,190,989 (1999: loss
of £4,274,000 by 139,364,613), being the weighted average number of Ordinary
Shares of 10 pence each in issue during the year after taking account of the
purchase of Ordinary Shares by the Employee Share Ownership Plan (ESOP).



In view of the significant impact of the amortisation of goodwill on earnings
per share calculated in accordance with Financial Reporting Standard 14 -
Earnings per Share, an adjusted earnings per share figure has been provided.



The adjusted basic earnings/(loss) per Ordinary Share is calculated by
dividing the profit after taxation and minority interests of £1,888,000 (1999:
loss of £4,274,000) and before amortisation of goodwill of £520,000, (1999: £
499,000) by 139,190,989 (1999: 139,364,613), being the weighted average number
of Ordinary Shares of 10 pence each in issue during the year.



No dilution arises as a result of share options in issue, as the value at
which they were granted is in excess of the market price at 31 December 2000,
and therefore no options would be exercised. Accordingly the diluted earnings/
(loss) per share is identical to the basic earnings/(loss) per share.



A reconciliation of basic earnings/(loss) per share with adjusted basic
earnings/(loss) per share is as follows:


                                          Pence per
                                              share
                           2000 Number of             1999 Number of Pence per
                                   shares                     shares     share
                          £'000                      £'000
Basic earnings/(loss)
per Ordinary Share
                          1,888 139,190,989    1.36p  (4,274)139,364,613 (3.07p)
Eliminate amortisation
of goodwill                 520           -    0.37p     499           -  0.36p
                            
                         --------- -------- --------  ------- --------- ------
Adjusted Basic earnings/
(loss) per
Ordinary Share
                          2,408 139,190,989    1.73p (3,775) 139,364,613 (2.71p)
                         ======  ========    ======  ======  ========    ======


4   TAXATION ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES


                                                                 2000     1999

                                                                £'000    £'000
                                                             ---------- --------
United Kingdom corporation tax on profit/(loss) on ordinary
activities at 30%                                                 193    (520)
Overseas taxation                                                 969      645

                                                             ---------- --------
                                                                1,162      125
                                                               ======   ======



The Group has taxable losses of £664,000 (1999: £1,400,000) available for
offset against future UK taxable profits.






5  RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH FLOW FROM OPERATING
   ACTIVITIES


                                                               2000        1999
                                                              £'000       £'000
                                                         ----------  ----------
Operating profit/(loss)                                       5,466     (1,989)
Depreciation of fixed assets                                    863         783
Amortisation of trademarks                                       18          44
Amortisation of goodwill                                        520         499
(Profit)/loss on sale of tangible fixed assets                 (54)          12
Decrease in stocks                                            1,775       6,032
(Increase)/decrease in debtors                              (4,548)       4,217
Increase/(decrease) in creditors                              1,122     (5,374)
Exchange movements in respect of foreign undertakings           173        (54)
                                                         ----------  ----------
Net cash inflow from operating activities                     5,335       4,170

                                                             ======      ======






6   RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT


                                                        2000               1999
                                                       £'000              £'000
                                                  ----------         ----------
Increase in cash in the year                             396                455
Cash outflow from decrease in debt and lease             464              5,304
financing
Changes in net funds resulting from cash flows           860              5,759
Foreign exchange movements                             (253)                729
New finance leases                                     (454)              (288)
                                                  ----------         ----------
Movement in net debt                                     153              6,200

                                                      ======             ======

Net debt at 1 January 2000                          (21,850)           (28,050)
Movement in net debt                                     153              6,200
                                                  ----------         ----------
Net debt at 31 December 2000                        (21,697)
                                                                       (21,850)
                                                      ======             ======




7     ANALYSIS OF CHANGES IN NET DEBT


                                    Foreign exchange   Other non-cash
                                           movements        movements
                  At 1 Jan                                            At 31 Dec
                      2000                     £'000            £'000      2000
                              Cash
                     £'000    flow                                        £'000

                             £'000

Cash at bank and     1,742   (398)                25                -     1,369
in hand
Overdrafts        (20,335)     794             (258)                -  (19,799)
                  ---------- ----------        ----------       ------  -------
                  (18,593)     396             (233)                -  (18,430)
                  ---------- ----------        ----------       ------  -------
Debt due within
one year
Bank loan            (711) (1,003)               (5)                -   (1,719)
Finance lease        (274)     339                 -            (260)     (195)
obligations
                  ---------- ----------        ----------       ------- --------
                     (985)   (664)               (5)            (260)   (1,914)
                  ---------- ----------        ----------       ------- --------
Debt due after
one year
Bank loan          (2,131)   1,115              (15)                -   (1,031)
Finance lease        (141)      13                 -            (194)     (322)
obligations
                  ---------- ----------        ----------       ------  -------
                   (2,272)   1,128              (15)            (194)   (1,353)
                  ---------- ----------        ----------       ------  -------
Net debt          (21,850)     860             (253)            (454)  (21,697)

                  ---------- ----------        ----------       ------ ---------


8     ANNUAL REPORT AND ACCOUNTS

Copies of the Report and Accounts are being mailed to shareholders shortly and
will be made available upon request to members of the public at the Company's
registered office at United House, Shrewsbury Avenue, Woodston, Peterborough,
PE2 7BZ.